How to be a VC: Being open

I always get asked how to get into VC and so I think a lot about what it takes to do the job well. I’m way early in my career, so I won’t say I’ve perfected anything yet, but after 8 years on the investing side and 3 in startups, I’ve come up at least one thing:

Be open.

In venture capital, you say “no” a lot. When you say no a lot, you get good at it. It comes off the tongue fast and in lots of different ways. It is your default response.

Practicing the word no as many times as a VC does means you have to fight not to have your mind close on you. I fight it…and fight it hard. I want your pitch to be the one I say yes to–and I want you to solve the inherent problems in your business model. I want to figure out if I can help you get there.

I don’t think that every VC takes the approach that anyone can be successful–or that every problem is fixable, which is weird to me because their job is to make people successful and fund things that solve problems. Yet, time and time again, I see well practiced dismissiveness.

You see it a lot in the language people use. “We only fund top entrepreneurs.” “We only hire A level people.” Very rarely do you hear “We can take hardworking, passionate people and make them really awesome at being CEOs.” For some, VC is about the picking rather than the fostering and growing.

Just take how most people approach networking events and talks. I give a lot of talks. In fact, I’ll talk just about anywhere if I’m free. I don’t mind talking to crowds, but most of all, I like listening to crowds–because I always learn something new or meet someone interesting. What’s weird to me is that a few times I’ve spoke, people were surprised that I hung around after to hear what the entrepreneurs in the crowd had to say. One event organizer had even asked me if I wanted to give my talk before the company demos, enabling me to duck out before the crowds could rush me.

Isn’t that what I get paid to do? Take pitches? Listen? Learn?

In today’s world, the democratization of technology means that the next big thing could literally come from anywhere. It won’t necessarily be built by a former Paypal Mafia member, or a YC alum. Pedigree does not equal future success.

Plus, it’s really susceptible to groupthink. True creativity comes from dissent and a diverse set of opinions.

“…dissent stimulates new ideas because it encourages us to engage more fully with the work of others and to reassess our viewpoints. “There’s this Pollyannaish notion that the most important thing to do when working together is stay positive and get along, to not hurt anyone’s feelings,” she says. “Well, that’s just wrong. Maybe debate is going to be less pleasant, but it will always be more productive. True creativity requires some trade-offs.”“

If you’re really going to find the next big thing, then you can’t only spend your time with people who built the last big thing. You need to find ways of being open and accessible.

Unfortunately, there’s a lot of the “velvet rope” mentality going on in venture. The first question out of investor mouths is too often, “Who else are you talking to?” rather than “How does it work?” or even better “How can I help you succeed?”

For a VC, I think the process of raising money humbles you. Perhaps this is why I see this behavior more in the junior folks who never have to pitch to LPs or who’ve never started a company. It makes you relate to the plight of the entrepreneur hitting the pavement a little more. You know how hard it is. You know what it’s like to sit alone in a room after the only person who ever would have bet on you says no, and you’re all out of money leads. You feel like you’ve been kicked in the stomach–and that’s before you have to go face your team.

I’m concerned that some of the newer folks in venture capital haven’t been kicked in the stomach enough. They’ve been through a half of one investment cycle and they think it will always been this good. I’m not sure if they’re in venture because they truly want to help someone change the world or because venture is simply the best exclusive club to get into post grad school.

They’re not in the trenches with the unwashed Twitter masses, attending Meetups, and putting themselves out there. They want introductions through their trusted network–pre-screened, pre-vetted pitches that already have product, traction, other investors with brand names. They spend more time networking with other VCs than helping entrepreneurs they haven’t even funded yet.

Some would argue that venture capital is more accessible than it has ever been–but I actually think it’s as further away from where it needs to be then ever. Thirty years ago, the only great tech being developed was being done in labs by scientists and engineers. There were literally only a handful of people and teams that had the capability and resources to get something off the ground–and so you only had to be accessible to a few people in a few specific places.

In a world where literally anyone can build anything on the cheap, is just being a Techstars mentor or a blogger enough? Sometimes, I think that’s a bit like false accessibility–where I’m open to you only if you’ve made it through this very selective program, or I’ll comment back to you but I won’t actually meet you. I’ll show up at a pitch event where someone has screened companies for me to see but I’m on the stage behind a protective barrier, readying the thumbs up or thumbs down like Chuck Norris at a dodgeball tourney. It still seems like too many hurdles.

People thought I was crazy to put my calendar on my website. I thought it was crazy that every VC doesn’t do that. It’s not like I have to take all the requests–so why wouldn’t I just try to be as open as possible, especially in a world where you can very easily vet anyone through Rapportive and a quick Google search.

People thought I was crazier for having the chat widget on my blog. Honestly, few people use it. Most of the time, they ask reasonable questions. If I’m busy, I can’t answer. Simple as that. I’m in a service business, so if you can’t get to me, I can’t provide my service. Seems pretty cut and dry to me.

Plus, I really just like meeting new people with different ideas than the ones I have in my head. If this doesn’t sound like you, maybe you shouldn’t be trying to get into VC. Don’t try to get in because you like the power dynamic of being a decision maker. Get in because you like people and like being challenged.

And get in, most importantly, because you like to serve. I went to Jesuit schools and their mantra is “Men and Women for Others.” If you don’t like helping people, venture capital isn’t for you.

Both Josh Kopelman and Fred Wilson have talked about the entrepreneurs being their customer. Maybe it’s just because I worked for both of them that I have this mindset. Josh Breinlinger has this mindset, too. He wrote a great post about what you tell entrepreneurs when they’re the problem in their pitch…and I really liked how hard he has tried to treat entrepreneurs well:

I read a lot of entrepreneur’s blogs and reviews on TheFunded. There was a pretty major theme I saw from a founder’s perspective:

VCs are jerks because they don’t follow up.

So, I thought I would change that. I’m not a jerk (according to at least a few people I know). I know how much time and energy went into preparing a pitch deck and trying to describe the vision for the company. I know that a startup at the early stages is the founder’s baby. I know that it sucks to try hard to get something only to receive… no response, no clear indication of what the investors were thinking and why.

I decided I would change the norm. I would reply to everyone who pitched me. I would give clear and concise reasons for passing if I decided to pass. I would offer to help out in other ways and I would actually mean it.

Ultimately, it’s really hard to do this. It’s tough to respond to every e-mail. There just isn’t enough time for all the e-mails–and the more you answer, the more you get back. It’s tough to show up to every event and still have a life. It’s tough to have to say no so many times but still be open to say yes. It’s tough to figure out what advice to give.